Zurich airport operator Unique is continuing to suffer under the negative impact of the collapse of Swissair, reporting a 23% drop in passenger traffic for the first half of this year.

Unique blames a reduction of services at Zurich resulting in losses of SFr1.8 million ($1.2 million) compared to a SFr41.5 million profit for the same period last year. Turnover at the former Swissair hub was down 9.1% at SFr248 million for the six months ending 30 June.

The operator says that the withdrawal of 20 Swissair short- and long-range aircraft resulted in the dramatic drop in passenger numbers.

It adds: “After the grounding of Swissair at the beginning of October 2001 and the subsequent collapse of the national airline, a decline in traffic volume had to be anticipated.”

The operator notes that movements at the airport were down 14.7%. Average passenger numbers per flight dropped 10.4% due to “the greatly reduced size of the home carrier’s long-distance fleet and the general trend on the part of airlines to deploy smaller aircraft”.

Unique says it is still on track to continue its SFr2.2 billion five-year expansion plan. The airport is in the process of renovating its terminal and adding a new dock mid-field with construction due for completion in 2005. And the company says it will reach a “positive result” for the full year.

For the full year 2001, Unique posted a SFr36 million loss against turnover of SFr537 million which included a SFr42.5 million write-off relating to debts owed by Swissair.

During the first six months of 2002, a total of 8,437,181 passengers used Zurich Airport as the starting point or destination of their journey, which represents a 23.6 percent drop versus the prior year. A total of 137,673 landings and take-offs were recorded on the three runways, 14.7 percent less than in the same period last year. After the grounding of Swissair at the beginning of October 2001 and the subsequent collapse of the national airline, a decline in traffic volume had to be anticipated.

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The average number of passengers per flight fell by 10.4 percent from 68.4 to 61.3. This was largely attributable to the greatly reduced size of the home carrier’s long-distance fleet and the general trend on the part of airlines to deploy smaller aircraft.
Turnover trend In the period under review, turnover fell from 272.9 million to 248.0 million Swiss francs (-9.1%) versus the same period last year. Despite the considerably lower traffic volume, Aviation revenue fell disproportionately
by 5.2 percent from 138.4 to 131.2 million Swiss francs. This figure was ositively influenced by additional income from the baggage handling and aircraft energy supply systems that Unique began to operate on 1 January 2002, and by the increase in passenger charges that came into effect on April 1, 2002.

Non-Aviation revenue fell from 134.5 million Swiss francs in the first half of 2001 to 116.8 million in the period under review (–13.2 percent). This trend was primarily attributable to three factors. A lower passenger volume gave rise to less income, especially in the commercial segment. External revenue from rented premises and utilities (electricity and heating charges, etc.) in the areas of baggage handling and aircraft energy supply systems fell by the wayside as a result of Unique’s take-over of the operation of these facilities, though this gap in revenue was compensated by additional income from the Aviation segment. Furthermore, in the freight segment revenue from rented premises and utilities also fell by the wayside, and this in its turn was partially compensated by correspondingly lower costs.
The proportion of Non-Aviation revenue to the total earnings is now 47.1 percent, versus the prior-year level of 49.3 percent. Unique intends to abide by its strategy of increasing the proportion of non-aviation versus aviation revenue through over-proportional growth of non-aviation revenues.
Key operating data and results Operating costs rose by 6.7 percent from 142.5 to 152.1 million Swiss francs. This increase was largely attributable to higher personnel costs. Up to the grounding of Swissair in October 2001, a variety of new jobs were created to secure the operation of additional infrastructure and in association with stage 5 of the expansion of the airport. Although there have been certain job cuts in the meantime, and the number
of full-time employees has therefore fallen (despite the adoption of personnel operating the baggage handling system), the jobs that were created in the second half of 2001 still burdened the books in the first half of 2002.
For the first six months of the year, earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to 95.9 million Swiss francs (–26.5 percent). The EBITDA margin was 9.1 percentage points below the prior-year level (38.7% versus 47.8 percent).. This means that an increase from 34.6 percent (including written-off debts associated with the SAirGroup crisis) to 38.7 percent was achieved versus the overall 2001 financial year. We were able to accomplish this thanks to the measures that were already introduced last autumn on both the revenue and the costs sides.

In the first half of 2002, earnings before interest and taxes (EBIT) amounted to 26.1 million Swiss francs, versus 74.8 million in the same period last year. This represents a drop of 48.7 million Swiss francs, or 65.1 percent. The results cited above, together with the higher financing costs versus the prior
year, gave rise to a loss of 1.8 million Swiss francs for the first half of 2002.
Investments and their Financing Investments totalled 249 million Swiss francs in the first half of 2002, a large proportion of which (211 million) was attributable to expansion stage 5. This means that investments were down by approximately 11.9 percent from the prior-year figure of 283 million Swiss francs. We were able to achieve this reduction even though work on expansion stage 5 went ahead according to plan. These investments were financed via an increase of 100 million Swiss francs in the loan from the Canton of Zurich, by an increase in shortterm bank loans to the tune of 121 million Swiss francs, and through internal funds. Interest-bearing borrowings
(net) rose to 1,692 million Swiss francs.

At the moment Unique disposes over scarcely 1,5 billion credit lines (without consideration of the outstanding bonds) from which approximately 560 millions Swiss francs are used. There are still approximately 1.0 billion Swiss francs at Unique's disposal which are not yet used and which are foreseen for financing the outstanding investments of the expansion stage 5.
Outlook for the second half year 2002 In a “normal” financial year, the turnover and profit of the group in the first half represent approximately 48
percent of the annual figures. In view of the very low traffic volume at the beginning of this year as a consequence of the events of 11 September and the grounding of Swissair, we are assuming that in the first six months of the current financial year we were able to generate approximately 46 to 47 percent of the anticipated annual turnover. Based on these considerations we believe that, unless any other major external occurrences interfere with Unique’s business activities, we will be able to report a positive annual
result for the group again.